Hackney Council's Cabinet Procurement and Insourcing Committee has approved the award of a significant contract for the development of a new heat network serving the Colville and Britannia areas of the borough, a move expected to reduce lifetime carbon emissions by over 100,000 tonnes.
The decision, made at a meeting on Wednesday 15 July 2026, will see Supplier A awarded a Design, Build, Operate and Maintain (DBOM) contract for the Colville Heat Network (CHN). The contract is valued at an estimated £34.81 million, including VAT, for an initial 15-year period, with a potential 10-year extension estimated to be worth an additional £10.2m.
The new heat network aims to transition away from individual fossil fuel heating systems towards a more efficient, low-carbon model. This project is a key component in meeting planning conditions for the Colville and Britannia developments, which mandate connection to a low-carbon district heat network, and contributes to Hackney's broader net-zero carbon objectives, supporting the Council's Climate Action Plan.
Councillor Rachel Nkiessu-Guifo, Chair of the Cabinet Procurement and Insourcing Committee, noted the importance of the project in moving from climate ambition to practical delivery. The network is designed to provide reliable and affordable heat for residents while reducing carbon emissions,
she stated.
The Colville Heat Network will rely on electrically powered heat pumps supported by gas backup generation. The selected heat pumps are expected to achieve a seasonal coefficient of performance of approximately 3.0, contributing to the projected lifetime emission reductions of more than 100,000 tCO2e over 40 years.
The committee's decision follows a comprehensive procurement process, including a period of direct negotiation under Regulation 50 of the Utilities Contracts Regulations 2016. This approach was taken after the initial tender process yielded no suitable bids. The compliant bid received significantly exceeded the Council's affordability envelope, contained extensive caveats and provisional allowances leading to material uncertainty around price and deliverability, sought to vary core contract terms, and excluded or created ambiguity over responsibility for the Britannia pipework.
The contract with Supplier A includes a KPI framework that will monitor strategic performance areas including carbon performance (delivery of low-carbon heat and contribution to climate objectives), energy efficiency (efficient operation and optimisation of whole-life performance), reliability and resilience (continuity of heat supply and effective operational performance), customer experience, operational responsiveness, and asset management and network performance (including water quality).
The financial viability of the project is based on a 40-year model, with risks related to energy market volatility, demand, interest rates, and grant funding being actively managed through contractual mechanisms and governance arrangements. The potential 10-year extension to the contract is subject to finalisation of contractual documents and Cabinet approval of the additional capital budget required for the scheme.
The design has progressed to approximately RIBA Stage 3+. Following contract award, mobilisation will commence, followed by construction and then the operational phase managed by Supplier A.
Alternative options considered and rejected included abandoning the heat network, delaying approval, re-tendering, using framework call-offs, separating design and build from operation and maintenance contracts, and insourcing the service. These options were discounted due to various concerns including mandatory planning requirements, potential loss of grant funding, increased costs, programme delays, and insufficient internal capacity for specialist operations.
The project is considered crucial for addressing climate change and supporting the borough's transition to a low-carbon future. Further details on the committee's decisions can be found in the Decisions Wednesday 15-Jul-2026 14.00 Cabinet Procurement and Insourcing Committee.
